Views on LIC Housing Finance 4QFY2016 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity research Analyst - Banking, Angel Broking) on LIC Housing Finance 4QFY2016 Results:

Marginally lower on bottom-line front while operating parameters improved

"LIC Housing Finance Ltd has come out with its 4QFY16 results with PAT of INR 448 cr, which is marginally lower than our expectations on the bottom-line front. However, on the other operating parameters the company has exhibited improvements. Gross NPAs has gone down by 13 bps to 0.45% from 0.58% in 3QFY16, while NNPA has gone down by 10 bps to 0.22% from 0.32%. The company has improved its NIM by 24 bps YoY and 13 bps QoQ to 2.71%. Lower cost of funds seems to help the company in better margins. For FY16 the company ended with a loan book growth of 16%, which is decent enough looking at the challenging macro environment.

We believe Housing Finance Companies like LIC Housing are expected to see improvement in operating parameters as demand for housing loans is expected to pick up in the years to come, backed by lower interest rate in the economy. At the CMP of INR 485 the stock is trading at 2.3x its FY17 Book Value. We maintain our BUY rating on the stock with a target price of INR 592."

Shares of LIC HOUSING FINANCE LTD. was last trading in BSE at Rs.485.2 as compared to the previous close of Rs. 480.8. The total number of shares traded during the day was 456072 in over 9620 trades.

The stock hit an intraday high of Rs. 490 and intraday low of 479.7. The net turnover during the day was Rs. 221123341.

Source : Equity Bulls

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